Samsung's PR machine is in full stride. Every time a new smartphone is launched they claim that sales are way ahead of schedule. It never fails – and each time over the last several years, reality showed the new phones were never as popular as hyped. Last year we posted a report titled "Mixed Profits Picture from Galaxy S6 Suppliers Indicate that the new Smartphone isn't the hit that they were hoping for." The Galaxy S6 and the S6 Edge were losers. This year's S7 offers little excitement for consumers and yet it's magically having strong sales.
A new Korean report published today states that "Samsung Electronics' latest flagship smartphone Galaxy S7 is enjoying strong sales since its launch on March 11. The company is not revealing sales figures, but industry watchers say the phone could become the best-selling Galaxy phone ever."
The report further noted that "In the U.S. and Europe, pre-orders more than doubled compared to the Galaxy S6, the website said. Nomura Securities predicted the Galaxy S7 sales could hit the 9 million mark by the end of this month that exceeded the earlier estimates of some 8 million units. Based on the positive customer reaction, analysts also upgraded their own sales outlook for the new Samsung phone."
Samsung's mobile chief and president Koh Dong-jin told reporters Wednesday after a weekly CEO meeting held at the Seoul headquarters that "We are upbeat about the current sales pace," but declined to comment on the sales target.
So who's upbeat and who is pumping the Samsung numbers? Basically analysts who want the stock to perform better. They even stooped to quote a US blogger who made a wild prediction of sales with no absolutely no proof to support their claims.
The news of sales exceeding expectations also has a clear context: T-Mobile, AT&T and Verizon are now offering 2 for 1 deals on the new Galaxy S7. These are huge carriers that will be able to move a lot of volume and I'm sure that Samsung has made this offer available to other carriers around the globe.
Imagine if Apple ever offered a 2 for 1 deal on a new flagship iPhone. Volume would go through the roof. There would be line-ups wrapped around the block several times over and be presented on the news as a pure chaos in every major city.
And lastly, pre-orders are reportedly higher than last year. Once again, Samsung offered all those pre-ordering the new S7 a free Galaxy Gear VR headset. With massive giveaways like that, analysts should be running from the stock, not embracing it. Next we'll be hearing how great their Gear VR headset is selling, even though they're giveaways in promotions. It's a joke.
If Samsung has to give away half of their new flagship smartphones in order to break a record, then you know that it is shear panic time at Samsung. It shows that they've lost confidence in the value of their devices. It shows that without gimmicks, they can no longer go head to head with Apple's flagship products.
While some analysts are hyping this up, it has to be seen for what it is – another disaster for Samsung who once again thinks that profitless volume has any meaning. Samsung's shareholders recently expressed their angry over deteriorating performance. This massive discounted tactic is truly a nightmare come true for those shareholders.
Even some level headed analysts have recently said that Samsung has lost its Luster due to a Lack of Profits.This latest round of heavy discounting with 2 for 1 deals isn't going to change their thinking anytime soon.
In the end, the news that the Samsung 'Galaxy S7' is breaking sales records is nothing more than a marketing shell game gone mad.